Rebecca Evans MS, Cabinet Secretary for the Economy, Energy and Planning
I wish to inform Members that, in accordance with the principles enshrined in Managing Welsh Public Money, I have agreed to formally write off funds awarded to Credu Charity Ltd (formerly named Porthcawl Harbourside CIC) in 2016 and 2017 towards the development and construction of a new Maritime Centre in Porthcawl, to the value of £1,641,682 (£929,380 ERDF and £712,302 Welsh Government match funding).
The Maritime Centre was one of 13 projects within the Welsh Government’s Tourism Attractor Destinations (TAD) operation, an EU funded programme, approved by WEFO in 2016 and delivered by Visit Wales/Tourism Development team under the 2014-2020 ERDF Programme.
Funding was awarded to Credu Charity Ltd for both capital and revenue costs towards a Maritime Centre to accommodate a Coastal Science and Discovery Centre, residential and commercial activities, a learning café/bistro and restaurant and facilities for local community groups.
In April 2020, Credu Charity Ltd representatives informed the Welsh Government (Visit Wales) that due to delays to the project, a projected overspend was expected. Following a review into the financial viability of the project, the Welsh Government notified Credu Charity Ltd that it would withdraw the remaining ERDF funding for the project and seek repayment of all ERDF funds previously paid.
The remaining ERDF funds were reallocated to Bridgend CBC for the construction of a smaller building at the Cosy Corner site originally designated for the Maritime Centre. This project was completed successfully and now provides space for local retail and start-up businesses in the tourism and hospitality sectors.
Credu Charity Ltd entered into liquidation in November 2020 and it is unlikely that there are funds to repay creditors. As a result, the Welsh Government is required to record the full value of the funding as a 'Claims Waived and Abandoned' loss.
Following an Audit Wales review into the grant management processes for this project which has been published today, the Welsh Government has implemented a number of measures to strengthen grant processes throughout the lifecycle of projects to further mitigate risks and protect the public purse.
The Welsh Government also conducted an internal review of the TAD programme which confirmed that whilst this was an isolated incident within the programme, there were broader lessons which could be learnt. This also informed the implementation of measures including additional checks on funding pre-conditions prior to payment and further monitoring and due diligence processes aimed at identifying any potential risks earlier in the project lifecycle and to strengthen expenditure controls.
This statement is being issued during recess to keep Members informed. Should Members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do so.